October 2019

The release of the Draft Design and Building Practitioners Bill 2019: Parliament to pass new laws on building design by November 2019

The rules governing the construction of new buildings are set to become more complex. The NSW government has released a draft law proposing a new layer of building regulation. This new layer will sit alongside the existing regulation administered by local government.

The government’s Draft Design and Building Practitioners Bill 2019 has just been put on public exhibition (on 2 October 2019) and submissions will close soon (on 16 October 2019).

The government intends to push it through Parliament before the end of November this year.

The draft law does not spell out the full picture. It is a ‘framework’ document only — with the detail to be coloured in by later regulations. The government says it will be working on (and consulting on) the regulations in 2020. This implies that the new law is not likely to commence before mid-2020 — or possibly even later.

Regulations do not need to be expressly approved by Parliament before coming into effect. This means that — with this proposed law — the government will be asking the Parliament to give it a broad mandate to decide the detail of the new scheme itself.

Background

The government says that the new law is a response to the ‘Building Confidence Report’ prepared by Peter Shergold and Bronwyn Weir.

That report was commissioned by the government as a result of:

concerns about combustible cladding and its involvement in the devastating fire in London’s Grenfell Tower, various high-rise building fires in Dubai and two incidents in the Lacrosse and Neo 200 buildings in Melbourne; and

building defects in new developments, such as those identified in relation to the Opal Tower development at Sydney Olympic Park.

Registration of practitioners

The proposed law would establish a new system for the registration ‘design practitioners’ (eg architects, engineers) and ‘building practitioners’ (eg builders) by the NSW Government’s Department of Customer Service.

The regulations may also embrace existing systems of registration — such as the one that exists for architects and the licencing scheme for home builders. The proposed law would also allow people with ‘designated qualifications’ to be automatically recognised (under the regulations) without the need for actual registration.

The details of precisely which design practitioners will need to be registered are not yet clear. It can be expected that engineers are likely to be captured by this new regime. However, the proposed law does not (as had been expected) prevent people from claiming to be ‘engineers’. It only prevents people from claiming to be a registered design practitioner. For example, if engineers are ultimately required to be registered, a claim to be a registered engineer would be unlawful.

Disputes about the registration (for example, a decision to deny registration) will be able to be reviewed in the NSW Civil and Administrative Tribunal (commonly called ‘NCAT’).

Regulated designs

The proposed law would apply to the ‘final design’ of some building work. The design of such building work would be known as a ‘regulated design’. The categories of building work that would be captured by the ‘regulated design’ regime are not yet clear. This is because it would be the job of the regulations to spell out this detail.

However, the proposed law does hint at what might be ‘regulated designs’. Specifically nominated for possible inclusion in the regulations are:

the fire safety systems for a building;

waterproofing;

load-bearing components of a building that are essential to the stability of the building (such as foundations and footings, floors, walls, roofs, columns and beams); and

components of a building that are part of the external enclosure of a building (e.g. roof systems and above grade external walls, external windows and external doors).

Design compliance declarations

A building practitioner who does building work (eg the principal contractor) will be obliged to ‘take all reasonable steps’ to obtain a ‘design compliance declaration’ for each building component that is the subject of the ‘regulated design’ regime.

Such a declaration could only be obtained from a ‘registered design practitioner’ (which would include a ‘recognised’ practitioner).

The precise requirements of a ‘design compliance declaration’ will be set out in the regulations. However — in general terms — it be a statement as to whether or not a regulated design prepared for building work complies with the requirements of the Building Code of Australia.

Principal compliance declarations

In some circumstances, a building practitioner would need to obtain a ‘principal compliance declaration’ for all the ‘regulated designs’ from a ‘registered principal design practitioner’.

A ‘principal design practitioner’ is a person who co-ordinates the provision of design compliance declarations for the purposes of building work done by a building practitioner.

It is not yet clear:

what categories of professionals will be able to be ‘principal design practitioners’; or

exactly what circumstances will trigger the need for a ‘principal compliance declaration’.

This will be dealt with in the regulations. However, it seems likely that:

architects and/or engineers might be able to make ‘principal compliance declarations’ as ‘registered principal design practitioners’; and

significant new residential buildings would be subject to the need for this type of declaration.

Again the detail of what is required by a ‘principal compliance declaration’ would be settled in the regulations. Nonetheless the proposed law makes it clear that a declaration would deal with:

whether a ‘design compliance declaration’ has been provided for each ‘regulated design’ prepared for the building; and

whether the ‘design compliance declarations’ have been provided by ‘registered design practitioners’.

Variations

Where a final design is varied, a fresh ‘design compliance declaration’ would need to be obtained. In some circumstances (to be decided by the regulations) a new ‘principal compliance declaration’ would be required.

These new requirements are likely to reduce existing flexibility to make changes to a project. This lines-up with separate changes to construction certificates and occupation certificates that also have this consequence (see our September 2019 article here.

Building compliance declarations

A building practitioner (eg a principal contractor) would be required to ‘take all reasonable steps’ to ensure that building work — covered by the ‘regulated design’ regime — is carried out in accordance with the design dealt with in the relevant ‘design compliance declarations’.

The proposed law would require ‘registered building practitioners’ to give building compliance declarations to their clients before any application for an occupation certificate is made.

A ‘building compliance declaration’ would need to deal with the following:

whether the building work complies with the requirements of the Building Code of Australia;

whether the building work complies with other requirements set out in the (yet to be written) regulations;

if the building work does not comply with either of the above requirements — the steps to be taken to ensure compliance;

for each ‘regulated design’ used for the building work — whether the building practitioner relied on (and built in accordance with) a design prepared by a registered design practitioner;

whether the building practitioner obtained a ‘design compliance declaration’ in relation to each of those ‘regulated designs’;

whether a registered principal design practitioner was appointed in relation to the regulated designs to which the ‘design compliance declarations’ relate; and

whether the building practitioner obtained a ‘principal compliance declaration’ in relation to the design compliance declarations.

While the proposed law does not say this, it seems likely that the regulations under the Environmental Planning and Assessment Act 1979 (the EP&A Act) would be amended to require that applications for occupation certificates include this information.

Presumably an occupation certificate would not be able to be issued if the declarations are not available. (We will only know for sure when the regulations are published.)

The building practitioner would also be obliged to directly notify the ‘principal certifier’ (ie the person who is presently called the principal certifying authority) of any steps that must be taken to ensure compliance with the Building Code of Australia and other requirements. Again, it seems likely that the regulations under the EP&A Act would be amended to stop an occupation certificate from being issued if these steps have not been completed.

Stop work orders

The Secretary of the Department (of Customer Service) would be able to issue a stop work order if the Secretary considers that:

building work is, or is likely to be, carried out in contravention of the new law; and

the contravention could result in significant harm or loss to the public or occupiers or potential occupiers of the building to which the work relates or significant damage to property.

A stop work order could have immediate effect. There would be no requirement for advance consultation as to whether a stop work order should be issued.

There would be an appeal right against the issue of a stop work order, but bizarrely, the appeal would not be to the Land and Environment Court but to the NSW Civil and Administrative Tribunal.

The Land and Environment Court has considerable expertise and experience in dealing with stop work orders of this kind. It is also able to act expeditiously when projects are halted and considerable sums of money and jobs are at stake. It is striking that — despite the Land and Environment Court being proposed as the court who would issue injunctions for the enforcement of the legislation — the Court is not to be entrusted with the role of dealing with appeals against stop work orders.

It also opens up a real problem of having the same matter of substance simultaneously being handled in two different forums — the Land and Environment Court and the NSW Civil and Administrative Tribunal.

This is because, if there has been a dispute about whether the right declarations were obtained (and/or the work has been carried out in accordance with the approved designs subject to those declarations) a building certificate might be sought. The proposed law foreshadows that the regulations under the EP&A Act may be amended to prohibit the issue of a building certificate unless compliance declarations or final regulated designs have been provided to the issuer of a certificate. Appeals from decisions about building certificates are dealt with in the Land and Environment Court.

Similarly, it is likely that development consents would also require compliance with the ‘regulated design’ regime. Accordingly, if a local council issues its own stop work order requiring compliance with the development consent, the appeal from the local council order would be heard in the Land and Environment Court.

Hopefully, this is something that the government will further consider before it introduces the law into state parliament. It will be a real problem if such matters are being litigated in two separate forums.

In short — more regulation, another layer

What does this mean for developers, builders and their consultants?

It seems that developers and builders will now be confronted by two regimes for the regulation of building detail.

The first regime is the one that already exists. This is where:

Development consents require compliance with the Building Code of Australia (the BCA).

Certifiers issue construction certificates confirming compliance with the relevant version of the BCA in force at the time that the application for the construction certificate was made. The principal certifying authority oversees the building work and, where necessary, local councils may issue orders requiring work to cease or be carried out differently.

A principal certifying authority must refuse to issue an occupation certificate if the building will be a hazard to the health or safety of the occupants of the building and/or if its design and construction is not generally the same (ie ‘not inconsistent’) as what is required by the development consent.

The second regime is as described above in the main body of this article. It provides for some building work to be the subject of an extra layer of regulation directed to the same purpose as first regime.

There is likely to be some adjustments to the existing regime to try and make it work with the new regime. However, there does seem to be duplication between the regime for ‘regulated designs’ and the existing system of construction certificates, building certificates and occupation certificates. Both are more-or-less doing the same thing. However, one is overseen by local government and the other would be overseen by the Department of Customer Service.

Let’s hope that more work is done to integrate these two regimes — so as to minimise the extra costs and complexities of having multiple public authorities covering the same ground.

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